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Space power! Tom Peters/
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Power Freaks Move Things Around!
Managing space broadly defined hereis an incredibly powerful way to bring about change. Moreover, it is a change tool thats typically underutilized. And a change tool thats readily available because of the fact that others are unaware of the potency of the tool or the degree to which small changes in space management can have enormous consequences. I thought Id collect a few examples here, from the mundane to the grand, to make the point. And, obviously, I hope to pique your interest if you dont happen to be a fanatic on this topic …
Geologists + Geophysicists + A little bit of love = Oil
A story from my McKinsey days: In an oil company engagement, we were looking at variation in companies success in finding oil. Its not as simple as Im making it here, but one company did stand outand one variable seemed to be of extraordinary importance. Throughout history, all functional organizations are at war with all other functional organizations. (The famed and ever so potent silos problem.) Scientists are amongst the worst actors. In oil-finding there are two particularly important scientific regimes. Geologists who like rocks. And geophysicistswho like data about rocks. (I greatly overstate.) At any rate they are historically warring tribes. The terrific oil-finding company was the only one which co-mingled physicallythe two groups. The synergy normally a word that scares methat came from this co-mingling was, it appeared, to the company and to us, through results and interviews, was extraordinary.
Stanfords Multi- disciplinary Center, GSKs CEDDs … Stanfords Multi- disciplinary Center, GSKs CEDDs …
Space as strategy: Stanfords president says the great institutions destiny will come via multi-disciplinary research. Such is the nature of the great problems confronting the world. Executing such a strategy has many parts. But one of the most important is a physical building which will be specifically devoted to multi-disciplinary research. Along the same lines, GlaxoSmithKline aimed to speed up drug discovery via multi-disciplinary teams. Again, a major component was space (a home) for each of the firms CEDDs/Centers for Excellence in Drug Discovery.
>100 feet = 100 miles
It was the only chart we used in In Search of Excellence! It arrived courtesy the research of Tom Allen and his colleagues at MIT. Studying communication patterns, they discovered that people more than a hundred feet apart might as well, in terms of communication frequency, be 100 miles apart!. Internet or no Internet (these days), that is nothing short of … stunning! And the implications are nothing short of profound!
It BEGINS (and ENDS ) in the …
parking lot* *Disney
Space of a sort. The psychology is clear. An enormous share of our perception of something is determined by first and last impressions. Duh, you say. To which I say, Okay, I know you know thatbut do you truly OBSESS on the design and management of … Beginnings and Endings ? The longtime master of this is Disney. Disney, in its parks, puts as much effort into the design of the parking lot experience as it does into their rides. In particular, the parking lot attendants are considered primo members of the performance arts teamselection, uniforms, training, etc of those attendants is a no-baloney strategic issue.
Round = 2X/all = 2X/all x
Table shape … as a strategic variable? Yup! At a round table there are more or less twice as many comments as there are at a square tablemoreover, the % of people who participate shoots through the roof in the round (more equitable) environment.
see green = recover 20% faster
If patients see greenery through their window, recovery time may shrink by as much as 20%.
Paint it white! Paint it white! On Hashem Akbaris [Lawrence Livermore labs] powerful program On Hashem Akbaris [Lawrence Livermore labs] powerful program to significantly reduce greenhouse gas emissions; using conservative to significantly reduce greenhouse gas emissions; using conservative assumptions, it could reduce 44 billion tons of CO2 emissions by cooling buildings, roads, entire cities (The Guardian, ) assumptions, it could reduce 44 billion tons of CO2 emissions by cooling buildings, roads, entire cities (The Guardian, )
Okay, its not really space except in a convoluted way (roof = space), but it is such a great story: In effect, a few cans of white paint would change the world. Paint (or otherwise coat) roofs, roads, etc WHITE and save 44 Billion Tons of CO2. Okay, its not really space except in a convoluted way (roof = space), but it is such a great story: In effect, a few cans of white paint would change the world. Paint (or otherwise coat) roofs, roads, etc WHITE and save 44 Billion Tons of CO2.
Trash the waste baskets …
… paper recycling soars!
No waste baskets under individual desks leads to a jump, in fact leap, in paper recycling.
Amazing as it sounds, experiments suggest its true: If a serving plate is six-and-a-half feet away, the number of second helpings does down by almost two-thirds. And on it goes: smaller plates, less food consumed. First plate out is vegetables, and, yes, more vegetables are consumed.
Parking lot location + Van schedule + Elevator speed + Food court location …
Sprint, in its old incarnation, did a bunch of little things to enhance fitness and health. The parking lot is a quarter mile from the officeand the vans are scheduled infrequently. The elevators are maddeningly slow in a three-floor building. The food court is not centrally locatedits as far away from as many people as possible.
Big carts = 1.5X 1.5X Source: Wal*Mart
Wal*Mart increased shopping cart sizeand saw its big- item purchases soar by 50%.
Bag sizes = New markets: $B $B Source: PepsiCo
Frito Lay went through a period years ago of trying to develop blockbuster productsto no avail. At one point the idea of changing bag sizes surfacedhardly a blockbuster! New bag sizes were addedand revenue soared by perhaps more than a billion $$$. Turns out: New bag size = New market. Standard bag sales stayed the same (no cannibalization), while the picnic-tailgate party big bag sales-market went through the roof!
3Ms nooks, Apples dorm commons room look 3Ms nooks, Apples dorm commons room look
In a new HQ in Austin, 3M designed little sitting areas near the restroomsinformal, multi-disciplinary noodling increased markedly. Apple, in a new R&D center designed seating areas: The ones decorated formally went virtually unused; the ones with low ceilings and comfy, unimposing furniture were always beehives of activity. In a new HQ in Austin, 3M designed little sitting areas near the restroomsinformal, multi-disciplinary noodling increased markedly. Apple, in a new R&D center designed seating areas: The ones decorated formally went virtually unused; the ones with low ceilings and comfy, unimposing furniture were always beehives of activity.
Broken windows: Clean the streets, fix the broken windows, ticket the open-beer-can holders, etc, etc Broken windows: Clean the streets, fix the broken windows, ticket the open-beer-can holders, etc, etc = Sense of order = Sense of order = Crime way down = Crime way down
The broken windows theory of policing has created no less than a revolution. To make a long story short, and a complex story simple: If you work on the little things that connote order fix broken windows, clean up sidewalks a communitys crime rate often tumbles. Issuing citations for little thingssuch as an open alcohol containeradds to the potency of the idea.
Deduction vs. cash Deduction vs. cashx
Major recessionary issue: getting people into the stores and spending! If a government incentive comes in the form a reduced payroll tax deduction shown on a pay stub, people tend to pay little attention and thence save the money. (Not a bad idea in most circumstancesbut not right now.) If the incentive comes in the form of a check, its seen as a windfall, and most of it will end up in the stores coffers!
401(k) active opt-in: 45% 401(k) as default: 86% Source: New York Times, (research by Richard Thaler, co-author Nudge) Thaler, co-author Nudge)
Design a form one way or another … and the world is turned upside downor not. When opting in or out of a 401(k) plan, if opting in is the default option … 86% sign up. But if one must take an action to opt in … only 45% sign up. Hence a tiny format leads to doubling or halving an incredibly important decision regarding ones future financial wellbeing.
Promised vs Delivered: +15% +15% Source; Elgin Corrugated Box
A specialty corrugated cardboard box company, Elgin Corrugated Box, was fanatic about finishing and delivering orders on or ahead of time. To get the most bang-for-the-buck from this obsession, they changed their invoice. After each order description, they added two columns: ORDER DUE. ORDER ARRIVED. Given their practices, the Arrived was unfailingly on or before the Due date. By the simple fact of the two columns which visibly reminded the customer of Elgins timeliness … revenues increased by an estimated 15%.
You want Customer Retention to become an obsession. There are a raft of ways to make that happen, including blunderbuss shots like a significantly altered incentive scheme. But there are visual ways as well. And one of the most powerful is to ensure that at every meeting on any topicHR and IS as much as marketingthe FIRST ITEM on the/any Agenda is ALWAYS … Customer Retention. Primacy and Repetition thereof are in fact powerful beyond measure.
Walls of yesterday?
Walls of tomorrow?
When Steve Jobs returned from the wilderness to Apple a few years ago, he ordered all signs of past glory removed from the premises. The walls and halls would be harbingers of tomorrows dreams, not reminders of yesterdays accomplishments. I remember years ago seeing a picture of a retired CEO in his studywalls covered with photos of the great men hed met in the past. Not all bad, but the guy didnt look all that old, and I remember thinking, How sad, no sign of tomorrow. I think this idea is important.
4F/FFFF * = Peters (F**) + Waterman (Closet F**) + SF (F***) =ISOE (F****)/Re-invention of McKinsey *Find a Fellow Freak Faraway **Freak, Closet Freak ***San Francisco = Faraway Home of Freaks ****Freak-ish Product (In Search of Excellence)
Place that looks like a skunk lives there = Skunkworks = Innovation
I call it the 4F Strategy. Or: Find a Fellow Freak Faraway. Its nigh on impossible to get a real innovation going close to headquarters. Big League corporate politics makes a mess of things. Got a great idea as an HQ staffer? Find a testbed (playground, a prominent friend calls it) a long way from the power centerand a Fellow Freak (playmate) and get on with it. The project that launched In Search of Excellence was conducted in San Francisco, roughly 3,000 miles away from McKinseys HQ. Theres more to the story, obviously, but the several degrees of separation made a huge difference. Another moniker for all this is the Skunkworks idea, pioneered by Lockheed to hastily build such aircraft as the SR-71 spy plane, crucial to Cold War success. The point (redux): When you need something Weird & Quickput a streamlined team of Weirdos in the boonies! While theres more to the story, the idea of a Tight-knit, Spartan Band of Renegades burrowed in a Distant Den has been proven to work time and time again.
When Bob Waterman and I wrote In Search of Excellence in 1982, business was by the numbersand the Americans were struggling (to put it mildly) with hands on, tactile stuff, like Japanese quality. Then, at Hewlett Packard, we were introduced to the famed HP Way, the centerpiece of which was in-touch management. HP had a term for this … MBWA. (Managing By Wandering Around.) Bob and I immediately fell in love. Not only was the idea per se important and cool, but it symbolized everything we were coming to cherishenterprises where bosses-leaders were in immediate touch with and emotionally attached to workers, customers, the product. The idea is as important or more important in fast-paced 2009 as it was in 1982.
Craig Johnson, a famed Venture Capitalist for three decades … refuses to invest in companies that are more than a 20- minute drive from his office. To guide them through the serpentine path ahead, he insists that he must be in constant touch as banker, advisor, friend.
Pat pays a visit …
Pat Carrigan was GMs first woman assembly plant boss. She was tough as nails. Upon taking, she immediately went to the plant floor and paid a visit to the local union boss. They had to partner or lose the plantthat was her message. But the real message was the visit itself. The union chief told me in a TV interview, In all my years here, whenever there was an issue, I was summoned to the factory boss office. Literally, Tom, in over a decade in this role, a plant boss has never walked to the shop floor, knocked on the door to my little office, and asked if they could come in for a chat. Theres the concept of partnership. And the reality of partnership. That visit per se was as important as the verbal message. (Obviously this act did not save GM. But a lot more like it just might have.)
The key to the dramatic strategy shift instituted by General David Petraeus in Iraq was working with neighborhoods. In his office, he had a giant poster with his four (only four) principles that marked his new Strategy. The last was in enormous in sizeand in red. Namely: WALK. In a world of soldiers in armed Humvees, a human-physical presence was key to a new approach.
We are the company we keep we keep
You will become like the five people you associate with the mostthis can be either a blessing or a curse. Billy Cox You will become like the five people you associate with the mostthis can be either a blessing or a curse. Billy Cox
We are what we eat … obviously. And we are who we hang out withjust as obviously. These are throw away linesbut in my opinion are truly PROFOUND lines as well. These lines, as the Cox quote suggests, are good news or bad newsVERY good news or VERY bad news often enough. But the GREAT news is that this frequently invisible variable is CONTROLLABLE and controllable from a less-than-powerful position. Manage hang out with as a strategic variableand you can move mountains!
The We are what we eat Axiom I: At its core, every (!!!) relationship-partnership decision (employee, vendor, customer, lunchmate, etc) is a strategic decision about: Innovate, Yes or The We are what we eat Axiom I: At its core, every (!!!) relationship-partnership decision (employee, vendor, customer, lunchmate, etc) is a strategic decision about: Innovate, Yes or No
The We are what we eat Axiom II: Hang out with cool and thou shalT become more cool. Hang out with dull and thou shalT become more dull. Period.
Let me put it as plainly as I can: I THINK- INSIST THAT HANG OUT [ON DAMN NEAR ANY DIMENSION] IS THE #1 MANAGEMENT- LEADERSHIP TOOL IN DETERMINING THE INNOVATIVENESSOR LACK THEREOFOF AN ORGANIZATION! Let me put it as plainly as I can: I THINK- INSIST THAT HANG OUT [ON DAMN NEAR ANY DIMENSION] IS THE #1 MANAGEMENT- LEADERSHIP TOOL IN DETERMINING THE INNOVATIVENESSOR LACK THEREOFOF AN ORGANIZATION!
Little = BIG
(1) Amenable to rapid experimentation/failure free experimentation/failure free (No bad PR, No $$) (No bad PR, No $$) (2) Quick to implement/Quick to Roll out Roll out (3) Inexpensive to implement/ Roll out Roll out (4) Huge multiplier (5) An Attitude (6) Does not by and large require a power position from which to power position from which to launch experiments. launch experiments.
The wonder of all this is that it has enormous power potential, and its inexpensive, quick and does not require a top job from which to launch experiments! The bad news (if it is that) that it is an attitude rather than a program one needs to be convinced of the potential and must be willing to try a lot of stuff (tiny modifications to a single variable spell doomor remarkable success).
(1) Half-day/25 ideas (2) One week/5 experiments (3) One month/Select best 2 (4) days/Roll out
Design is everything. Everything is design. We are all designers. Inspiration: The Power of Design: A Force for Transforming Everything, Richard Farson